Bitcоin

3 Reasons Bitcoin’s Price Could Soon Rise to $10K

Bitcoin jumped above $9,500 on Wednesday, ending a four-week-long low-volatility squeeze. 

Now the cryptocurrency looks set to climb toward the psychological hurdle of $10,000, as suggested by several factors.

  • Bitcoin’s high of $9,551 on Wednesday was its highest level since June 24, according to CoinDesk’s Bitcoin Price Index. 
  • The gain has confirmed a Bollinger band breakout on the daily chart and opened the doors for a move of $400 or more on the higher side, as noted by Adrian Zdunczyk, CEO of trading community The BIRB Nest in a blog post.
  • Bollinger bands are volatility indicators placed two standard deviations above and below the 20-day moving average.
  • They had recently narrowed to levels last seen in November 2018 as the cryptocurrency traded in the very restricted range of $9,000–$9,400. 
  • A big move often follows a period of very low volatility.
  • Open interest or open positions in bitcoin futures listed on the Chicago Mercantile Exchange (CME) – considered synonymous with institutional interest – jumped 15% to a one-month high of $452 million on Wednesday. 
  • The metric has risen by 24% over the past three days alongside bitcoin’s uptick from $9,120 to $9,550, according to data source Skew.
  • Global open interest (as gauged by data from 12 major crypto derivatives exchanges) has risen above $4 billion for the first time since early March.
  • A price rally is said to have legs if it is accompanied by an uptick in open interest.
  • The “risk-on” mood in the traditional markets further supports stronger gains for the leading cryptocurrency. 
  • Global stock markets are trading at five-month highs while the U.S. dollar, a safe haven in times of crisis, is languishing near March lows, according to Investing.com.
  • The EU’s fiscal stimulus deal and market expectations of an additional U.S. coronavirus stimulus package are pushing stocks higher.
  • Bitcoin has recently developed a stronger positive correlation with the equity markets.
  • It’s worth noting that escalating China-U.S. tensions pose a risk to the equity market rally and possibly bitcoin prices.

Disclosure: The author holds no cryptocurrency at the time of writing.

   

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